Indian SMEs contribute 45% to country’s GDP: Report
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In MasterCard’s ‘Micro Merchant Market Sizing and Profiling Report’ released in collaboration with Confederation of All India Traders, the company has claimed small businesses make up for 45% of India’s GDP, around three times of what Corporate India contributes. The sector is also said to be employing close to 46 crore people, and growing at 11.5% annually.India is pre-dominantly a cash-based economy, with less than 5% of the country’s personal consumption expenditure of $1.1 trillion transacted via digital payments.
“Cash can cost businesses up to 2% of their operating costs, including labor over-heads. Cash is not free”, Ravinder S. Aurora, Groud Head, Global Policy Affairs and Community Relations at
The country currently with a population of over 1.2 billion has a mere 12 lakh POS terminals. Aurora claims a mere 1.5% of the 10 crore of India’s small traders currently have cards.
“As a consumer, the transactional cost is a major deterrent. The government should offer tax breaks and incidental benefits as incentives to
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MasterCard has promised to get over 500 million new consumers onto the digital payments bandwagon by 2020, and Aurora claims India is a major strategic market for the company.
Image Credit: Indiatimes
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